The Associated Builders and Contractors is celebrating today after Texas Gov. Greg Abbott (R) signed the Neutrality in State Government Contracting bill (HB 985) into law.
The legislation protects Texas taxpayers by ensuring all of Texas’ skilled construction workforce can compete on a level playing field for public works contracts to build projects utilizing state funding or credit.
“As Texas continues to attract new businesses and residents, ensuring that investment in public construction is protected from controversial government-mandated project labor agreements allows all of Texas’ construction businesses—large and small, union and nonunion—to compete for public work on a level playing field,” says Jon Fisher, president of ABC Texas, in a statement.
Introduced by Rep. Tan Parker (R-63) and sponsored by Sen. Kelly Hancock (R-9), the law prohibits governments from mandating project labor agreements on certain taxpayer-funded construction projects, thereby ensuring all Texans can build their communities.
The new law invites 96 percent of Texas’ private construction workforce who have chosen not to join a labor union to work on projects in their own communities, funded by their own tax dollars, ABC explains.
According to the organization, government-mandated PLAs typically discourage competition from qualified local businesses by forcing contractors to recognize unions as the representatives of their employees and hire most or all employees from union hiring halls and union apprenticeship programs. Employers must also follow union work rules and pay into union benefits and multi-employer pension plans, in addition to any existing company benefit plans, putting them at a significant competitive disadvantage.
“Congress and the Trump administration should follow the lead of Texas and 24 other states by immediately enacting a similar policy that will maximize competition, reduce costs and guarantee the fiscal accountability taxpayers deserve on federal and federally funded construction projects,” says Ben Brubeck, ABC vice president of regulatory, labor and state affairs.
According to ABC, government-mandated PLAs can raise costs by 12-18% compared to non-PLA projects, which results in fewer public works projects and reduced construction industry job creation. A May 2017 study by the Beacon Hill Institute, “Project Labor Agreements and the Cost of School Construction in Ohio,” found that PLAs raised the base construction cost of building Ohio schools by 13%, or $23 per square foot in 2016 prices.